EXHIBIT (g)(2)
XXXXX XXXXX ENHANCED EQUITY INCOME FUND II
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT effective this 20th day of December, 2004 between Xxxxx Xxxxx
Management, a Massachusetts business trust (the "Adviser"), and Rampart
Investment Management Company, Inc., a Massachusetts corporation (the
"Sub-Adviser").
WHEREAS, Xxxxx Xxxxx Enhanced Equity Income Fund II (the "Trust") is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as a
closed-end, management investment company; and
WHEREAS, pursuant to an Investment Advisory Agreement, dated December 20, 2004
(the "Advisory Agreement"), a copy of which has been provided to the
Sub-Adviser, the Trust has retained the Adviser to render advisory and
management services with regard to the Trust's options strategy; and
WHEREAS, pursuant to authority granted to the Adviser in the Advisory Agreement,
the Adviser wishes to retain the Sub-Adviser to furnish investment advisory
services to the Trust related to the Trust's options strategy, and the
Sub-Adviser is willing to furnish such services to the Trust and the Adviser.
NOW, THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between the Adviser and the Sub-Adviser
as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser to act as the
investment adviser for and to manage the investment and reinvestment of the
assets of the Trust related to the Trust's option strategy on the terms set
forth in this Agreement. The Sub-Adviser accepts such appointment and agrees to
furnish the services herein set forth herein for the compensation herein
provided. The Sub-Adviser shall not be responsible for aspects of the Trust's
investment program other than its option strategy, including without limitation
purchases and sales of securities other than options, selection of brokers to
conduct such purchases and sales of securities other than options, compliance
with investment policies and restrictions other than those concerning options,
or proxy voting.
2. SUB-ADVISER DUTIES. Subject to the supervision of the Trust's Board of
Trustees (the "Board") and the Adviser, the Sub-Adviser will provide a
continuous investment program relating to the Trust's purchase or sale of
options for the Trust's portfolio. Subject to approval of the Trust's Board and
notice to the Sub-Adviser, the Adviser retains complete authority immediately to
assume direct responsibility for any function delegated to the Sub-Adviser under
this Agreement. Subject to the foregoing, the Sub-Adviser will provide options
investment research and conduct a continuous program of options evaluation,
investment, sales, and reinvestment of the Trust's assets by determining the
options strategy that the Trust shall pursue, including which options shall be
purchased, entered into, sold, closed, or exchanged for the Trust, when these
transactions should be executed, and what portion of the assets of the Trust
shall have options written against. The Sub-Adviser will provide the services
under this Agreement in accordance with the Trust's investment objective or
objectives, policies, and restrictions as stated in the Trust's Registration
Statement filed with the Securities and Exchange Commission ("SEC"), as amended
(the "Registration Statement"), copies of which shall be sent to the Sub-Adviser
by the Adviser prior to the commencement of this Agreement and promptly
following any such amendment. The Adviser and the Sub-Adviser further agree as
follows:
a. Each of the Adviser and the Sub-Adviser will conform with the 1940 Act
and all rules and regulations thereunder, all other applicable federal and
state laws and regulations, with any applicable procedures adopted by the
Trust's Board of which the Sub-Adviser has been sent a copy, and the
provisions of the Registration Statement, of which the Sub-Adviser has
received a copy and with the Sub-Adviser's portfolio manager operating
policies and procedures as are approved by the Adviser. Each of the Adviser
and the Sub-Adviser shall exercise reasonable care in the performance of
its duties under the Agreement.
b. In connection with any purchase and sale of securities for the Trust
related to the implementation of the options strategy developed by the
Sub-Adviser, the Sub-Adviser will arrange for the transmission to the
custodian for the Trust (the "Custodian") on a daily basis such
confirmation, trade tickets, and other documents and information,
including, but not limited to, Cusip, Cedel, or other numbers that identify
options to be purchased or sold on behalf of the Trust, as may be
reasonably necessary to enable the Custodian to perform its administrative
and recordkeeping responsibilities with respect to the Trust. With respect
to options to be settled through the Trust's Custodian, the Sub-Adviser
will arrange for the prompt transmission of the confirmation of such
options trades to the Trust's Custodian.
c. The Sub-Adviser will assist the Custodian in determining or confirming,
consistent with the procedures and policies stated in the Registration
Statement or adopted by the Board, the value of any options or other assets
of the Trust for which the Sub-Adviser is responsible and for which the
Custodian seeks assistance from or identifies for review by the
Sub-Adviser; provided that the Sub-Adviser shall be responsible for
determining in good faith, consistent with the procedures and policies
stated in the Registration Statement or adopted by the Board, the fair
value of the Trust's portfolio of options for which the Sub-Adviser is
responsible and shall obtain at its own expense pricing services for the
Trust's portfolio of options from Interactive Data ("IDS"), Bloomberg, or
another pricing service to be mutually agreed. The parties acknowledge that
the Sub-Adviser is not a custodian of the Trust's assets and will not take
possession or custody of such assets.
d. Following the end of the Trust's semi-annual period and fiscal year, the
Sub-Adviser will assist the Adviser in preparing a letter to shareholders
containing a discussion of relevant investment factors in respect of both
the prior quarter and the fiscal year to date.
e. The Sub-Adviser will complete and deliver to the Adviser for each
quarter by the 5th business day of the following quarter a written
compliance checklist in a form provided by the Adviser relating to the
performances of the Sub-Adviser under this Agreement.
f. The Sub-Adviser will make available to the Trust and the Adviser,
promptly upon request, any of the Trust's investment records and ledgers
maintained by the Sub-Adviser (which shall not include the records and
ledgers maintained by the Custodian or portfolio accounting agent for the
Trust) as are necessary to assist the Trust and the Adviser to comply with
requirements of the 1940 Act and the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), and the rules under each, as well as other
applicable laws. The Sub-Adviser will furnish to regulatory authorities
having the requisite authority any information or reports in connection
with such services in respect to the Trust which may be requested by such
authorities in order to ascertain whether the operations of the Trust are
being conducted in a manner consistent with applicable laws and
regulations.
g. The Sub-Adviser will provide reports to the Board for consideration at
meetings of the Board on the options portion of the investment program for
the Trust and the options purchased and sold for the Trust's portfolio, and
will furnish the Board with such periodic and special reports as the Board
and the Adviser may reasonably request.
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h. The Adviser shall assure that the Trust complies with its investment
policies and restrictions as set forth in the Registration Statement,
except for policies and restrictions concerning implementation of the
Trust's options strategy, and the Adviser acknowledges that the Sub-Adviser
shall not be responsible for the Trust's compliance with its investment
policies and restrictions other than those concerning implementation of the
Trust's option strategy.
i. The Adviser acknowledges that the Sub-Adviser shall not be responsible
for meeting or monitoring compliance with the income and asset
diversification requirements of Section 851 of the Internal Revenue Code,
and the Adviser acknowledges that the Adviser is responsible for the same.
3. BROKER-DEALER SELECTION. The Sub-Adviser is authorized to make decisions
to buy and sell options for the Trust's portfolio, and to select broker-dealers
and to negotiate brokerage commission rates in effecting an option transaction.
The Sub-Adviser's primary consideration in effecting an option transaction will
be to obtain the best execution for the Trust, taking into account the factors
specified in the prospectus and/or statement of additional information for the
Trust, and determined in consultation with the Adviser, which include price
(including the applicable brokerage commission or dollar spread), the size of
the order, the nature of the market for the option, the timing of the
transaction, the reputation, experience and financial stability of the
broker-dealer involved, the quality of the service, the difficulty of execution,
and the execution capabilities and operational facilities of the firm involved,
and the firm's risk in positioning a block of options. Accordingly, the price to
the Trust in any transaction may be less favorable than that available from
another broker-dealer if the difference is reasonably justified, in the judgment
of the Sub-Adviser in the exercise of its fiduciary obligations to the Trust, by
other aspects of the portfolio execution services offered. The Sub-Adviser shall
not receive any research service from any broker-dealer or from any third party
that is paid by such broker-dealer in return for placing trades through such
broker-dealer on behalf of the Trust. The Sub-Adviser will consult with the
Adviser to ensure that portfolio transactions on behalf of the Trust are
directed to broker-dealers on the basis of criteria reasonably considered
appropriate by the Adviser. To the extent consistent with these standards, the
Sub-Adviser is further authorized to allocate the orders placed by it on behalf
of the Trust to an affiliated broker-dealer. Such allocation shall be in such
amounts and proportions as the Sub-Adviser shall determine consistent with the
above standards, and the Sub-Adviser will report on said allocation regularly to
the Trust's Board indicating the broker-dealers to which such allocations have
been made and the basis therefore.
4. DISCLOSURE ABOUT SUB-ADVISER. The Sub-Adviser has reviewed the most
recent Amendment to the Registration Statement for the Trust filed with the SEC
(the "Registration Statement") that contain disclosure about the Sub-Adviser,
and represents and warrants that, with respect only to the disclosure expressly
concerning the Sub-Adviser, its business, operations, or employees, such
Registration Statement contains, as of the date hereof, no untrue statement of
any material fact and do not omit any statement of a material fact which was
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading. The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Advisers Act and will maintain such
registration so long as this Agreement remains in effect. The Adviser hereby
acknowledges that it has received a copy of the Sub-Adviser's Form ADV, Part II
at least 48 hours prior to entering into this Agreement.
5. EXPENSES. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it and its staff and for their activities in connection
with its duties under this Agreement including, but not limited to, rental and
overhead expenses, expenses of the Sub-Adviser's personnel, pricing services in
accordance with Section 2, insurance of the Sub-Adviser and its personnel,
research services, and taxes of the Sub-Adviser. The Adviser or the Trust shall
be responsible for all other expenses of the Trust's or the Adviser's
operations, including without limitation costs of marketing or distributing
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shares of the Trust, brokerage expenses and commissions, custody and banking
expenses, administration expenses, legal, audit and other professional expenses,
governmental filing fees, and costs of communications with shareholders.
6. COMPENSATION. For the services provided to the Trust, the Adviser will
pay the Sub-Adviser an annual fee equal to the amount specified in Schedule A
hereto, payable monthly in arrears on the last business day of each month. The
fee will be appropriately prorated to reflect any portion of a calendar month
that this Agreement is not in effect among the parties. The Adviser is solely
responsible for the payment of fees to the Sub-Adviser, and the Sub-Adviser
agrees to seek payment of its fees solely from the Adviser. The Trust shall have
no liability for Sub-Adviser's fee hereunder.
7. MATERIALS. During the term of this Agreement, the Adviser agrees to
furnish the Sub-Adviser at its principal office all prospectuses, proxy
statements, and reports to shareholders prepared for distribution to
shareholders of the Trust, all sales literature or advertisements for the Trust,
and all other communications with the public of the Trust, or the Adviser that
refer to the Sub-Adviser in any way, prior to the use thereof, and the Adviser
shall not use any such materials if the Sub-Adviser reasonably objects in
writing within 2 business days (or such other period as may be mutually agreed)
after receipt thereof. The Sub-Adviser's right to object to such materials is
limited to reasonable objections related to the portions of such materials that
expressly relate to the Sub-Adviser, its services and its clients. The Adviser
agrees to use its reasonable best efforts to ensure that materials prepared by
its employees or agents or its affiliates that refer to the Sub-Adviser or its
clients in any way are consistent with those materials previously approved by
the Sub-Adviser as referenced in the first sentence of this paragraph.
8. COMPLIANCE.
a. As required by Rule 206(4)-2 under the Advisers Act, the Sub-Adviser has
adopted written policies and procedures reasonably designed to prevent
violation by it, or any of its supervised persons, of the Advisers Act and
the rules under the Advisers Act and all other laws and regulations
relevant to the performance of its duties under this Agreement. The
Sub-Adviser has designated a chief compliance officer responsible for
administering these compliance policies and procedures. The chief
compliance officer at the Sub-Adviser's expense shall provide such written
compliance reports relating to the operations and compliance procedures of
the Sub-Adviser to the Adviser and/or the Trust and their respective chief
compliance officers as may be required by law or regulation or as are
otherwise reasonably requested. Moreover, the Sub-Adviser agrees to use
such other or additional compliance techniques as the Adviser or the Board
may reasonably adopt or approve, including written compliance procedures.
b. The Sub-Adviser agrees that it shall promptly notify, if legally
permitted, the Adviser and the Trust (1) in the event that the SEC has
censured the Sub-Adviser; placed limitations upon its activities, functions
or operations; suspended or revoked its registration as an investment
adviser; commenced proceedings or an investigation (formally or informally)
that may result in any of these actions; or corresponded with the
Sub-Adviser on a non-routine basis concerning either the Sub-Adviser's
performances under this Agreement or any other matter that might materially
affect the ability of the Sub-Adviser to perform its duties under this
Agreement, including sending a deficiency letter or raising issues about
the business, operations, or practices of the Sub-Adviser, (2) in the event
of any notice of investigation, examination, inquiry, audit or subpoena of
the Sub-Adviser or any of its officers or employees by any federal, state,
municipal or other governmental department, commission, bureau, board,
agency or instrumentality. If legally permitted, the Sub-Adviser will
furnish the Adviser, upon request, copies of any and all documents relating
to the foregoing. The Sub-Adviser further agrees to notify the Adviser and
the Trust promptly of any material fact known to the Sub-Adviser respecting
or relating to the Sub-Adviser that is not contained in the Registration
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Statement or prospectus for the Trust, or any amendment or supplement
thereto that is required to be so contained, or if any statement contained
therein concerning the Sub-Adviser that becomes untrue in any material
respect.
c. The Adviser agrees that it shall promptly notify, if legally permitted,
the Sub-Adviser (1) in the event that the SEC has censured the Adviser or
the Trust; placed limitations upon either of their activities, functions,
or operations; suspended or revoked the Adviser's registration as an
investment adviser; suspended or revoked the Trust's registration under the
1940 Act, issued any stop order concerning any offering of the Trust's
securities, or has commenced proceedings or an investigation that may
result in any of these actions, or corresponded with the Adviser or the
Trust on a non-routine basis concerning the management or operations of the
Trust or the advisory services provided by the Adviser to the Trust that
would have a material adverse impact on the Sub-Adviser or (2) upon having
a reasonable basis for believing that the Trust has ceased to qualify or
might not qualify as a regulated investment company under Subchapter M of
the Internal Revenue Code. If legally permitted, the Adviser will furnish
the Sub-Adviser, upon request, copies of any and all documents relating to
the foregoing.
d. The Sub-Adviser will provide the Adviser with such reports,
presentations, certifications and other information as the Adviser may
reasonably request from time to time concerning the business and operations
of the Sub-Adviser in performing services hereunder or generally concerning
the Sub-Adviser's investment advisory services, the Sub-Adviser's
compliance with applicable federal, state and local law and regulations,
and changes in the Sub-Adviser's key personnel, investment strategies,
policies and procedures, and other matters that are likely to have a
material impact on the Sub-Advisers duties hereunder. The Adviser and the
Trust shall provide the Sub-Adviser with such reports as the Sub-Adviser
may from time to time reasonably request concerning their compliance with
applicable federal, state and local law and regulations.
9. BOOKS AND RECORDS. The Sub-Adviser hereby agrees that all records which
it maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's or the
Adviser's request in compliance with the requirements of Rule 31a-3 under the
1940 Act, although the Sub-Adviser may, at its own expense, make and retain a
copy of such records. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-l under the 1940 Act.
10. COOPERATION; CONFIDENTIALITY; PROPRIETARY RIGHTS. Each party to this
Agreement agrees to cooperate with the other party and with all appropriate
governmental authorities having the requisite jurisdiction (including, but not
limited to, the SEC) in connection with any investigation or inquiry relating to
this Agreement or the Trust. Subject to the foregoing, the Sub-Adviser shall
treat as confidential and use only in connection with the Trust in accordance
with this Agreement all information pertaining to the Trust, actions of the
Trust or the Adviser, and the Adviser shall treat as confidential and use only
in connection with the Trust in accordance with this Agreement all information
furnished to the Trust or the Adviser by the Sub-Adviser (and all derivative
works produced therefrom), in connection with its duties under this Agreement
except that the aforesaid information need not be treated as confidential if
required to be disclosed under applicable law, if generally available to the
public through means that do not involve a breach of this section by the
Sub-Adviser or the Adviser, or if available from a source other than the
Adviser, Sub-Adviser or the Trust. The parties acknowledge that any breach of
the undertaking in the immediately preceding sentence might result in immediate,
irreparable injury to another party and that, accordingly, equitable remedies,
including ex parte remedies, are appropriate in the event of any actual,
apparent, or threatened breach of such undertaking.
The Adviser acknowledges that the Sub-Adviser is the sole owner of the
names "Rampart Investment Management" and "ROMS", and all related names, marks,
and trade dress (the "Rampart Marks") and all associated goodwill. The Adviser
shall not take any action inconsistent with such ownership, including, without
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limitation, contesting the Sub-Adviser's ownership of or validity of the Rampart
Marks. The Adviser agrees that all use of the Rampart Marks under this Agreement
inures to the benefit of the Sub-Adviser. Apart from the license granted in the
next paragraph, the Adviser shall acquire no right, title or interest of any
kind or nature whatsoever in the Rampart Marks and the goodwill associated
therewith by virtue of this Agreement. The Adviser shall upon request execute
and deliver such documents as the Sub-Adviser may reasonably require to further
evidence, assure, and confirm the rights of the Sub-Adviser in the Rampart
Marks.
The Sub-Adviser hereby grants to the Adviser and the Trust a non-exclusive
worldwide license to use, publish, reproduce, modify, and distribute the Rampart
Marks solely in connection with the conduct of the business of the Trust and in
accordance with this Agreement (the "License"). The Adviser and the Trust shall
not use, publish, reproduce, modify or distribute any Rampart Marks for any
other purpose. The Adviser and the Trust shall comply with the reasonable
written instructions of the Sub-Adviser concerning the use of the Rampart Marks
under the License, including instructions concerning trademark notices and
updates of the Rampart Marks. The Sub-Adviser shall have the right to monitor
and observe the Adviser's and the Trust's use of the Rampart Marks pursuant to
the License for the purpose of protecting and maintaining its control over the
nature and quality of the Rampart Marks, and the Adviser shall upon request
supply Rampart with a written accounting of such use.
The Adviser acknowledges that the Sub-Adviser is the sole owner of the
Rampart Options Management System ("ROMS"). The Adviser shall not take any
action inconsistent with such ownership, including, without limitation,
contesting the Sub-Adviser's ownership of ROMS. The Adviser shall acquire no
right, title or interest of any kind or nature whatsoever in ROMS under this
Agreement. This section does not prohibit the Advisor, for the Trust or other
clients, or the Trust from either (1) contesting what constitutes part of ROMS;
(2) from using any systems, methods or processes for selecting or trading
options that are not proprietary to the Sub-Adviser; or (3)without the use of
any proprietary processes, methods, or systems of the Sub-Adviser, managing the
options strategy of the Trust where a portion of the stocks in the portfolio
have options written on them with the intention of generating income.
11. CONTROL. Notwithstanding any other provision of the Agreement, it is
understood and agreed that the Trust shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and has reserved the right to reasonably direct any action hereunder
taken on its behalf by the Sub-Adviser.
12. LIABILITY.
a. Except as may otherwise be required by the 1940 Act or the rules
thereunder or other applicable law, the Adviser agrees that the
Sub-Adviser, any affiliated person of the Sub-Adviser, and each person, if
any, who, within the meaning of Section 15 of the Securities Act of 1933,
as amended (the "1933 Act"), controls the Sub-Adviser shall not be liable
for, or subject to, any damages, expenses, or losses in connection with,
any act or omission connected with or arising out of any services rendered
under this Agreement, except by reason of willful misfeasance, bad faith,
or gross negligence in the performance of the Sub-Adviser's duties, or any
breach by the Sub-Adviser of its obligations or duties under this
Agreement.
b. Except as may otherwise be required by the 1940 Act or the rules
thereunder or other applicable law, the Sub-Adviser agrees that the
Adviser, any affiliated person of the Adviser, and each person, if any,
who, within the meaning of Section 15 of the 1933 Act, controls the Adviser
shall not be liable for, or subject to, any damages, expenses, or losses in
connection with, any act or omission connected with or arising out of any
services rendered under this Agreement, except by reason of willful
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misfeasance, bad faith, or gross negligence in the performance of the
Adviser's duties, or any breach by the Adviser of its obligations or duties
under this Agreement.
13. INDEMNIFICATION.
a. The Adviser agrees to indemnify and hold harmless the Sub-Adviser, any
affiliated person of the Sub-Adviser, and each person, if any, who, within
the meaning of Section 15 of the 1933 Act controls ("controlling person")
the Sub-Adviser (all of such persons being referred to as "Sub-Adviser
Indemnified Persons") against any and all losses, claims, damages,
liabilities, or litigation (including legal and other expenses) to which a
Sub-Adviser Indemnified Person may become subject under the 1933 Act, the
1940 Act, the Advisers Act, under any other statute, at common law or
otherwise, arising out of the Adviser's responsibilities to the Sub-Adviser
which (1) may be based upon the Adviser's gross negligence, willful
misfeasance, or bad faith in the performance of its duties, or by reason of
the Adviser's disregard of its obligations and duties under this Agreement
and to the Trust, or (2) may be based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
or prospectus covering shares of the Trust, or any amendment thereof or any
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was
made in reliance upon and conformity with information furnished by the
Sub-Adviser to the Adviser or the Trust expressly for inclusion in such
Registration Statements, prospectuses, amendments, or supplements either in
writing or orally with a subsequent confirmation by the Sub-Adviser of the
information as it appears in the Registration Statement or prospectus;
provided however, that in no case shall the indemnity in favor of the
Sub-Adviser Indemnified Person be deemed to protect such person against any
liability to which such person would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of
its duties, or by reason of its breach or reckless disregard of its
obligations or duties under this Agreement.
b. Notwithstanding Section 12 of this Agreement, the Sub-Adviser agrees to
indemnify and hold harmless the Adviser, any affiliated person of the
Adviser, and any controlling person of the Adviser (all of such persons
being referred to as "Adviser Indemnified Persons") against any and all
losses, claims, damages, liabilities, or litigation (including legal and
other expenses) to which an Adviser Indemnified Person may become subject
under the 1933 Act, 1940 Act, the Advisers Act, under any other statute, at
common law or otherwise, arising out of the Sub-Adviser's responsibilities
as Sub-Adviser of the Trust which (1) may be based upon the Sub-Adviser's
gross negligence, willful misfeasance, or bad faith in the performance of
its duties, or by reason of the Sub-Adviser's disregard of its obligations
or duties under this Agreement, or (2) may be based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or prospectus covering the shares of the Trust, or
any amendment or supplement thereto, or the omission or alleged omission to
state therein a material fact known or which should have been known to the
Sub-Adviser and was required to be stated therein or necessary to make the
statements therein not misleading, if such a statement or omission was made
in reliance upon and conformity with information furnished by the
Sub-Adviser to the Adviser or the Trust expressly for inclusion in such
Registration Statements, prospectuses, amendments, or supplements either in
writing or orally with a subsequent confirmation by the Sub-Adviser of the
information as it appears in the Registration Statement or prospectus;
provided, however, that in no case shall the indemnity in favor of an
Adviser Indemnified Person be deemed to protect such person against any
liability to which such person would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence in the performance of its
duties, or by reason of its breach or reckless disregard of its obligations
and duties under this Agreement.
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c. The Adviser shall not be liable under Paragraph (a) of this Section 13
with respect to any claim made against a Sub-Adviser Indemnified Person
unless such Sub-Adviser Indemnified Person shall have notified the Adviser
in writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon such Sub-Adviser Indemnified Person (or after such Sub-Adviser
Indemnified Person shall have received notice of such service on any
designated agent), but failure to notify the Adviser of any such claim
shall not relieve the Adviser from any liability which it may have to the
Sub-Adviser Indemnified Person against whom such action is brought except
to the extent the Adviser is prejudiced by the failure or delay in giving
such notice. In case any such action is brought against the Sub-Adviser
Indemnified Person, the Adviser will be entitled to participate, at its own
expense, in the defense thereof or, after notice to the Sub-Adviser
Indemnified Person, to assume the defense thereof, with counsel
satisfactory to the Sub-Adviser Indemnified Person. If the Adviser assumes
the defense of any such action and the selection of counsel by the Adviser
to represent the Adviser and the Sub-Adviser Indemnified Person would
result in a conflict of interests and therefore, would not, in the
reasonable judgment of the Sub-Adviser Indemnified Person, adequately
represent the interests of the Sub-Adviser Indemnified Person, the Adviser
will, at its own expense, assume the defense with counsel to the Adviser
and, also at its own expense, with separate counsel to the Sub-Adviser
Indemnified Person, which counsel shall be satisfactory to the Adviser and
to the Sub-Adviser Indemnified Person. The Sub-Adviser Indemnified Person
shall bear the fees and expenses of any additional counsel retained by it,
and the Adviser shall not be liable to the Sub-Adviser Indemnified Person
under this Agreement for any legal or other expenses subsequently incurred
by the Sub-Adviser Indemnified Person independently in connection with the
defense thereof other than reasonable costs of investigation; provided
however, the Adviser shall be responsible for the additional counsel of
Sub-Adviser in the event the Adviser is determined to have made the
fraudulent representations, by the final decision of a court of competent
jurisdiction (that is not subject to appeal or as to which the time for
appeal has elapsed), and such representations are the basis for which
Sub-Adviser's liability is based. The Adviser shall not have the right to
compromise on or settle the litigation without the prior written consent of
the Sub-Adviser Indemnified Person if the compromise or settlement results,
or may result in a finding of wrongdoing on the part of the Sub-Adviser
Indemnified Person.
d. The Sub-Adviser shall not be liable under Paragraph (b) of this Section
13 with respect to any claim made against an Adviser Indemnified Person
unless such Adviser Indemnified Person shall have notified the Sub-Adviser
in writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon such Adviser Indemnified Person (or after such Adviser
Indemnified Person shall have received notice of such service on any
designated agent), but failure to notify the Sub-Adviser of any such claim
shall not relieve the Sub-Adviser from any liability which it may have to
the Adviser Indemnified Person against whom such action is brought except
to the extent the Sub-Adviser is prejudiced by the failure or delay in
giving such notice. In case any such action is brought against the Adviser
Indemnified Person, the Sub-Adviser will be entitled to participate, at its
own expense, in the defense thereof or, after notice to the Adviser
Indemnified Person, to assume the defense thereof, with counsel
satisfactory to the Adviser Indemnified Person. If the Sub-Adviser assumes
the defense of any such action and the selection of counsel by the
Sub-Adviser to represent both the Sub-Adviser and the Adviser Indemnified
Person would result in a conflict of interests and therefore, would not, in
the reasonable judgment of the Adviser Indemnified Person, adequately
represent the interests of the Adviser Indemnified Person, the Sub-Adviser
will, at its own expense, assume the defense with counsel to the
Sub-Adviser and, also at its own expense, with separate counsel to the
Adviser Indemnified Person, which counsel shall be satisfactory to the
Sub-Adviser and to the Adviser Indemnified Person. The Adviser Indemnified
Person shall bear the fees and expenses of any additional counsel retained
by it, and the Sub-Adviser shall not be liable to the Adviser Indemnified
Person under this Agreement for any legal or other expenses subsequently
incurred by the Adviser Indemnified Person independently in connection with
the defense thereof other than reasonable costs of investigation. The
Sub-Adviser shall not have the right to compromise on or settle the
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litigation without the prior written consent of the Adviser Indemnified
Person if the compromise or settlement results, or may result in a finding
of wrongdoing on the part of the Adviser Indemnified Person.
14. DURATION AND TERMINATION.
a. This Agreement shall become effective on the date first indicated above,
subject to the condition that the Trust's Board, including a majority of
those Trustees who are not interested persons (as such term is defined in
the 0000 Xxx) of the Adviser or the Sub-Adviser, and the Holders of
Interests in the Trust, shall have approved this Agreement in the manner
required by the 1940 Act. Unless terminated as provided herein, this
Agreement shall remain in full force and effect through and including
September 24, 2006 and shall continue in full force and affect indefinitely
thereafter, but only so long as such continuance is specifically approved
at least annually by (a) the Board, or by the vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of the Trust,
and (b) the vote of a majority of those Trustees who are not interested
persons (as such term is defined in the 0000 Xxx) of any such party to this
Agreement cast in person at a meeting called for the purpose of voting on
such approval.
b. Notwithstanding the foregoing, this Agreement may be terminated: (a) by
the Adviser at any time without payment of any penalty, upon 60 days' prior
written notice to the Sub-Adviser and the Trust; (b) at any time without
payment of any penalty by the Trust, by the Trust's Board or a majority of
the outstanding voting securities of the Trust, upon 60 days' prior written
notice to the Adviser and the Sub-Adviser, or (c) by the Sub-Adviser upon 3
months' prior written notice unless the Trust or the Adviser requests
additional time to find a replacement for the Sub-Adviser, in which case
the Sub-Adviser shall allow the additional time requested by the Trust or
Adviser not to exceed 3 additional months beyond the initial three-month
notice period; provided, however, that the Sub-Adviser may terminate this
Agreement at any time without penalty, effective upon written notice to the
Adviser and the Trust, in the event either the Sub-Adviser (acting in good
faith) or the Adviser ceases to be registered as an investment adviser
under the Advisers Act or otherwise becomes legally incapable of providing
investment management services pursuant to its respective contract with the
Trust.
c. In the event of termination for any reason, all records of the Trust
shall promptly be returned to the Adviser or the Trust, free from any claim
or retention of rights in such record by the Sub-Adviser, although the
Sub-Adviser may, at its own expense, make and retain a copy of such
records. This Agreement shall automatically terminate in the event of its
assignment (as such term is described in the 1940 Act). In the event this
Agreement is terminated or is not approved in the manner described above,
the Sections or Paragraphs numbered 9, 10, 11, 12, and 13 of this Agreement
shall remain in effect, as well as any applicable provision of this Section
14 and, to the extent that only amounts are owed to the Sub-Adviser as
compensation for services rendered while the agreement was in effect,
Section 6.
15. NOTICES. Any notice must be in writing and shall be sufficiently given
(1) when delivered in person, (2) when dispatched by electronic mail or
electronic facsimile transfer (confirmed in writing by postage prepaid first
class air mail simultaneously dispatched), (3) when sent by internationally
recognized overnight courier service (with receipt confirmed by such overnight
courier service), or (4) when sent by registered or certified mail, to the other
party at the address of such party set forth below or at such other address as
such party may from time to time specify in writing to the other party.
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If to the Trust:
Xxxxx Xxxxx Enhanced Equity Income Fund II
The Xxxxx Xxxxx Building
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Chief Legal Officer
If to the Adviser:
Xxxxx Xxxxx Management
The Xxxxx Xxxxx Building
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Chief Legal Officer
If to the Sub-Adviser:
Rampart Investment Management, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
16. AMENDMENTS. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved as required by applicable law.
17. MISCELLANEOUS.
a. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or rules or orders of the
SEC thereunder, and without regard for the conflicts of laws principles
thereof. The term "affiliate" or "affiliated person" as used in this
Agreement shall mean "affiliated person" as defined in Section 2(a)(3) of
the 0000 Xxx.
b. The Adviser and the Sub-Adviser acknowledge that the Trust enjoys the
rights of a third-party beneficiary under this Agreement, and the Adviser
acknowledges that the Sub-Adviser enjoys the rights of a third party
beneficiary under the Advisory Agreement.
c. The Sub-Adviser expressly acknowledges the provision in the Declaration
of Trust of the Adviser limiting the personal liability of the Trustee and
officers of the Adviser, and the Sub-Adviser hereby agrees that it shall
have recourse to the Adviser for payment of claims or obligations as
between the Adviser and the Sub-Adviser arising out of this Agreement and
shall not seek satisfaction from the Trustee or any officer of the Adviser.
d. The captions of this Agreement are included for convenience only and in
no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
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e. To the extent permitted under Section 14 of this Agreement, this
Agreement may only be assigned by any party with the prior written consent
of the other party. This Agreement shall terminate upon its assignment, and
for purposes of this section the term "assignment" shall have the meaning
assigned to it in the 1940 Act.
f. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby, and to this extent, the provisions of this
Agreement shall be deemed to be severable.
g. Nothing herein shall be construed as constituting the Sub-Adviser as an
agent or co-partner of the Adviser, or constituting the Adviser as an agent
or co-partner of the Sub-Adviser.
h. This Agreement may be executed in counterparts.
i. The Sub-Adviser shall not be responsible for any failure to perform its
duties under this Agreement as a result of war, acts of terrorism, natural
disasters, failures of electricity, telephone lines, and other utility
services, closures of securities and options markets, and other events
beyond the reasonable control of the Sub-Adviser provided the Sub-Adviser
has maintained contingency procedures reasonably designed, where possible,
to prevent and mitigate the effect of such events.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
Xxxxx Xxxxx Management
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Vice President, and not individually
RAMPART INVESTMENT MANAGEMENT COMPANY, INC.
By:
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
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SCHEDULE A
Annual Investment Sub-Advisory Fee
0.235% of Assets under Management
The Trust's daily net assets shall be computed in accordance with the
Declaration of Trust of the Trust and any applicable votes and determinations of
the Board of the Trust.
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